US eases sanctions as Iran behaves

Iran President Hassan Rouhani

Washington, Jan. 20 (Agencies): The US has followed through on promised sanctions relief for Iran covering oil exports, trade in precious metals and automotive services as part of a nuclear agreement that began taking effect today.

The US took steps to suspend sanctions on non-American people engaged in transactions related to Iran’s petrochemical exports. India also imports oil from Iran.

In exchange for steps that Tehran took to halt its most sensitive nuclear activity, the White House said the US, Britain, France, Germany, Russia, China and the European Union “will today follow through on our commitment to begin to provide the modest relief agreed to with Iran”.

“At the same time, we will continue our aggressive enforcement of the sanctions measures that will remain in place throughout this six-month period,” White House spokesperson Jay Carney said in a statement.

As Iran had fulfilled its initial nuclear commitments under the deal, the administration had taken “the necessary steps to pause efforts to further reduce Iranian crude oil exports,” the US treasury department said.

This will allow the six current customers of Iranian oil to maintain their purchases at current reduced levels for the six-month duration of an interim nuclear deal between Iran and world powers, it said.

A US official said Iran was currently exporting about 60 per cent less oil than it was two years ago and would be held to those reduced levels.

The relief is the controversial culmination of a promise that President Barack Obama made as a presidential candidate to engage with US adversaries, including Tehran.

It has tested ties with top ally Israel and prompted both fellow Democrats and Opposition Republicans in Congress to pursue legislation that would increase sanctions against the long-time US foe. Obama has vowed to veto such action.

State department spokesperson Jen Psaki said the Iran deal would pave the way for negotiations on a long-term deal to contain Iran’s nuclear programme. Those negotiations, she said, “will be even more complex, and we go into it clear-eyed about the difficulties ahead”.

The official said Washington would allow Iran to access, in instalments, $4.2 billion of oil revenues frozen overseas in a set schedule across the six-month period. The last instalment would be accessible on the final day of the period, he said.

“This temporary relief will not fix the Iranian economy. It will not come close,” a senior administration official told reporters on a conference call.

The official noted that inflation in the country remained near 40 per cent — one of the highest in the world —and its economy was expected to contract further.